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Closing Bell With Maria Bartiromo

News/Business. Maria Bartiromo. Analysis of the day's winners and losers in the stock market. New.

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01:00:00

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San Francisco, CA, USA

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Comcast Cable

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Virtual Ch. 58 (CNBC)

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mpeg2video

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ac3

PIXEL WIDTH
528

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480

TOPIC FREQUENCY

Us 10, U.s. 7, United States 4, Geico 4, Obama 3, Mandy 3, Michigan 3, Washington 3, Europe 3, Phil Lebeau 3, Google 2, Apple 2, Hsbc 2, Kayla Tausche 2, Steve 2, Robert Frank 2, Tom Cole 2, Cialis 2, John Boehner 2, Boehner 2,
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  CNBC    Closing Bell With Maria Bartiromo    News/Business. Maria Bartiromo. Analysis of the  
   day's winners and losers in the stock market. New.  

    December 10, 2012
    4:00 - 5:00pm EST  

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specific direction, we're still in that not making head wind. we're not making any head wind on it. >> thanks peter. always good to see you. again our two fiscal cliff portfolios for the first time since the election of november 6th, they are betting we will not go over the fiscal cliff interestingly enough. right now the dow up just 15 points as we head towards the close. much more to come on the second hour of "closing bell." and it's that time of day. it's 4:00 p.m. here on wall street. maria will be back in the seat tomorrow. as the clock winds down to the fiscal cliff deadline, this is how we're finishing on wall street. at this stage it looks like we got a gain of only 14 points for the dow.
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obviously we were higher than that, not much more but were higher earlier in the day. the nasdaq up by only eight points and the s&p finishing up by just a trickle of positive. well, ticktock. the market is closed. seems to be waiting once again for some clear signal on what's going to happen with regards to the fiscal cliff. how can you make money in the final trading sessions of the year amongst all this uncertainty? >> we have definite answers coming with our panel. back with us nathan bachrach from the financial network. also matt mccormick, sandy lincoln, and john spolinsani. what do we do between now and the end of the year? >> we wait. you hope there will be a resolution with the fiscal cliff. also 2013 could be a difficult year. it's the first year of the presidential term which is usually a weak un. earnings growth looks a little
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bit weaker. we are very big on di dends. we believe this is a grinded out market. prepare for instability. >> so it's glass half empty for you right now. >> we'd like to be optimistic but tell clients buy with sound balance sheets. and if the market goes up better, we're in a better position. >> i have to press you on what you say about you like companies that pay better dividends? >> right now you're looking at the. senate bill will will tax for gross incomes of $250,000. that's not a deal killer. there was an article this week talking about how dividends -- people buy dividends for income and downside protection. those issues do not go away regardless of what happens with taxes. people need income. >> you told us last time you liked europe. what about here in the united states? what would you buy here? >> well, i wouldn't buy anything if i haven't bought it already. i would sit around and wait.
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you've got she nan nanigans goi in washington. there are 535 people who have to think i want to keep my job. they'll decide to rise above. this is all going to be wonderful. in the meantime, if you're trying to figure out which way to go, i have traders out here who will tell you every day very difficult thing to do. >> isn't that the case. for sure. >> sandy, weigh in here. what would you be doing? >> actually i take a little bit different view. this fiscal cliff is a grander issue than just the united states. the drag in the u.s. is a big import to the rest of the world. stock markets are supposed to be leading economic indicators. if you look at the markets around the world from the last several weeks to months, the markets seem to be indicating just the opposite. they seem to be indicating that a deal will get done. what kind of deal whether it's one stage or two stage, nobody knows. but the fact of the matter is the equity markets tend to look
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three to six months out. they're giving good signs around the world. in europe, asia, emerging markets and here in the u.s. what i'd be doing is sitting on a well structured portfolio regardless of what the economic outcome is. well diversified across markets, across countries. some emerging large caps. most importantly dividend growers. i'll have a bit of exception with your last guest. i think this is a much more global story. i think a lot of backdrop in europe and china has some improving trends in it that are behind this. >> if the market is such a great predictor, tell me where it was in beginning of 2008. then we had a total collapse. so i don't buy -- >> my response would be look where it was in march of '09 when you could have -- [ overlapping speakers ] the valuations weren't reasonable then. they are cheap now and even cheaper outside the united states. >> yeah. you just made my case for why it
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is i feel like going outside the united states. i'll let america settle it and figure it out on its own. >> all right. john, what are your clients telling you right now? jeff just said i think it was over the weekend that so many of their customers are clenched right now. that they're just waiting to see what the resolution of the fiscal cliff is that they're holding back on orders. is that the case with some of your clients as well? >> well, i think right now we haven't received the clarity of the election we were hoping for. i think both sides republicans and democrats are basically negotiating behind closed doors. hopefully i think the news over the weekend was a lot better than it had been. moving a little bit. senator corker moving as well. we had better data out of china last week. household net worth increased by $1.7 trillion which was a big number for the fed. it says the bernanke policies are working. in terms of clients what they're doing, obviously there's a lot of clouds on the horizon short-term. but longer term, it's positive. so right now towards the end of the year what we've been seeing
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is a lot of accounts looking to take out short positions and stocks that have been hef sli shorted. so you've seen stocks like sears holdings, jcpenney, hewlett-packard, facebook, all those types of stocks that have a high short interest. since there's not a lot of clarity outside in terms of the fiscal cliff, they're going after those shorts and pressing them to the table. [ overlapping speakers ] >> -- quality dividends. if you see volatility happening, it's going to strong balance sheets. buy stability, protection, fundamentals. >> and remember that every central bank in the world is full bore in the mote. it's just a matter of time when that velocity picks up. we think it'll be the begin og the year. >> try the end of the year. a lot will have to get sorted out. we're not going to get any solution on january 1st. >> we're going to have one way or the other.
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[ overlapping speakers ] >> first let's take the first step. let's get to january first without blowing up. if we blow through january 1st then if you've been patient, start putting your money in slowly. you'll have wonderful opportunities. >> so he's 100% in cash. >> there's a very good backdrop here for the consumer which consumer confidence is at a four of five-year high. you've got the housing up -- >> so is their debt, by the way. >> there are a lot of things in here that you've got going on. >> and gas prices coming down. >> -- strong operating margins. i think there's a good case to be made that the story in the u.s. is a little bit stronger than portrayed. it's not going to pivot at the end of january or end of december, it's a solid story going into those months. >> i think some people should take a trip out to the midwest and see what's going on and you'll have a different feeling for what's going on in the rest of the country. >> all i can say is i'm going to miss the fiscal cliff when this is over. we're all going to have to go back to work. >> there will be another crisis to talk about.
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there you go. >> thank you, guys. appreciate you. >> okay, everybody. the dow posting its first four-day winning streak since mid-october. only a gain of 14 points today, but whatever. there you go. we've had a four-day winning streak. mary thompson has been our eye on the floor today. she joins us. what were the leaders we saw today? >> a leader today was mcdonald's. the dow component coming out with better than expected sales numbers thanks to some new additions to its low price budget menu. that was a winner. also we saw this continued strength in computer hardware stocks. they were up for five days in a row. they've had a very strong move off of a 52-week low that they touched back in november. this despite weakness in apple which continues to underperform. the rest of the computer hardware makers, investors selling this stock for tax purposes and people expressed concerns about the growth prospects today. of course we have jeffreys cutting its estimate for the
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stock from 700 to 800 dollars. retailers not winners today. retailers broadly lower ever since they announced december sale numbers. they've been under pressure since then. of course another data point we're looking at for the retailers will be thursday's numbers on retail sales. back to you. >> good place to finish there, mary. we're going to be talking about the american consumer. whether or not the american consumer is in trouble. news that could rattle stocks in 2013. courtney reagan is taking the pulse of u.s. stocks next. and as the fiscal cliff turns, president obama campaign style once again today. this time in michigan. that after talking with house speaker john boehner over the weekend. their firps one on one in weeks. is that why republicans are saying they would swallow higher taxes for the right deal on spending cuts? we'll talk to tom cole who is
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making that case in just a few minutes. bmw and mercedes are looking for the best selling luxury brand in the united states. wait until you hear what your money can get you these days. you're watching cnbc. ...so as you can see, geico's customer satisfaction is at 97%. mmmm tasty. and cut! very good. people are always asking me how we make these geico adverts. so we're taking you behind the scenes. this coffee cup, for example, is computer animated.
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it's not real. geico's customer satisfaction is q rea this computer-animated coffee tastes dreadful. geico. 15 minutes could save you 15 % or more on car insurance. someone get me a latte will ya, please?
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is the u.s. consumer in trouble? the front page on this morning's "wall street journal" says yes. but are holiday sales and shipping proving otherwise? courtney reagan is on top of that story. >> today is a big day when it comes to holiday shipping and spending. it's fedex's busiest day of the year counting all the orders. ceo estimates it will move a record 19 million parcels today. that's up 11% from last year. part of the reason for the increase is the boom in online sales. the more people click, the more fedex ships. they are shipping millions of gifts ordered on cyber monday. the second monday of december or green monday as coined by ebay is usually the heaviest of the month.
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last year green monday was walmart.com's heaviest traffic day in december. the world's largest retailer again offering special deals today hoping history repeats itself and shoppers have yet another reason to spend. comscore expects more than $1 billion will be spent online today. >> despite the expectations for online holiday sales, some are fearing they're facing a host of economic head winds that might put a damper on overall spending. >> reporting that the consumer is losing some of its spending muscle. is that the real concern there? let's talk about this from both side. stewart hoffman of pnc financial actually seeing strength in the consumer right now. steven, what's your biggest concern about the consumer right now? >> my biggest concern about the consumer is the fact we aren't generating enough income.
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we've seen the consumers dip into what they used to do and go to credit and we've seen a big jump up in consumer credit. and the savings has been dipping as a result. the net effect of that to me is slowing down the improvement of the balance sheet which is something that really needs to be done over the long haul. the fact that we don't have the income is the end result factor. you may see a redistribution of sales simply because they don't have the inventory at box stores. >> i hear what steve just said. but given the jobs report, we've also seen a drop in gasoline prices. when you get the -- when you remember the prices fell by gasoline. your decline in prices. that's a big increase in consumer spending and probably
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income last month. so i think consumers can replenish savings just a little bit and still have spending. you also have at the upper end $20 billion and growing of dividends declared this month. to beat the tax hike. that's $20 billion of cash flow that higher income individuals, not all of them but many of them will get. and much of that will end up being spent. >> you acknowledge that university in michigan consumer sentiment, that was big decline. and much of that is attributable to fears about the fiscal cliff. all bets could be off the table if we go off the fiscal cliff. >> sure if you go over the cliff. and you'll still have some tax hikes. we have consumer spending around 2% in real terms in line with income. we don't think the whole tax hikes will go into effect early next year. so yeah if you go over the cliff, lots of things consumers, businesses, you name it. but i don't think we're going to go over the cliff.
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at least we're noi not going to dive over. and i think without that, the dividend income and net consumer spending, consumer confidence number watch what people do. not what they say. other measures of confidence have been doing much better and that'll rebound. >> if we just back up for a second, steven, we talk about the fiscal cliff every day. those who are in the market talk about the fiscal cliff every day. does the average consumer out there moms and pops, do they talk about the fiscal cliff? does it factor into their spending efforts? >> not really. that's a great question. and the answer is no, not really. what i think really is happening with the michigan numbers and the sentiment numbers is a little bit of optimism that followed on the back of the election process. and then it's settling back in that nothing's going to change. nothing is going to get better. nothing's happening in washington. there is no movement towards consensus on either side of the debate. people look at that and say what were we so optimistic about? i think the cliff will be more of an effect afterwards. but to go back to stewart's
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point, he's talking about 2% growth in spending. 2% consumer growth is probably going to produce a very weak gdp number. although we had a nice number on the boost, we'll have a horrible in the next quarter. which isn't great. that's really the point. 11% rise in fedex sales not going to lead in an 11%? consumer spending. at beast we're looking at 2%. that's not good. >> my 2% forecast is for next year. i think we'll do better this quarter. and you don't sell 15.5 million cars in the month of november if consumers can't get the credit. and they're not in somewhat of a spending mood and feel they have the income to justify it. >> well, it is subprime lending that is driving that. 45% of all new leases are subprime. that's not particularly good. they have cut the lease rates dramatically. we've seen a big surge up in
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auto spending that's taking place. however, we're also slowing down the pace of domestic sales. and i think it will be lower next year. >> got it. thank you, gentlemen. >> thank you. let's go back over to kayla tausche for the market flash. >> we're watching shares of hsbc with word coming in that the bank and the federal regulators are near a settlement that will be record in size. roughly $9 billion and announced tomorrow. that is over just allegations that hsbc had controls in place for money laundering to places like iran and other regions where u.s. has financial sanctions there. that would be a record settlement and comes at a time when being hit about that exact issue. we'll be watching the tape for that tomorrow. >> all right. thank you very much. so death to the dreaded death tax?
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one of our next guests says they hurt the economy more than they help and he calls them jobs killers. a heated debate on the death tax coming up here. but coming up next, more republican lawmakers are saying they are open to higher tax rates on the rich if they come with spending cuts. that's a really big if. we're going to speak with one gocongressman who will lay out the spending cuts he would like to see, he needs to see in order to vote on the higher taxes. and we wanted to give you a heads up on a hot slide show on cnbc.com that highlights predictions that went wrong this year. one great example, doomsday forecast that the u.s. bond market would go bust. thankfully that did not happen. quite the opposite, as a matter of fact. there's more on the cnbc.com. check it out on our website. we're back on tv in just a moment. tdd# 1-800-345-2550 you should've seen me today. tdd# 1-800-345-2550 when the spx crossed above its 50-day moving average, tdd# 1-800-345-2550 i saw the trend. tdd# 1-800-345-2550 it looked really strong. tdd# 1-800-345-2550 and i jumped right on it.
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investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal. i heard you guys can ship ground for less than the ups store. that's right. i've learned the only way to get a holiday deal is to camp out. you know we've been open all night. is this a trick to get my spot? [ male announcer ] break from the holiday stress. save on ground shipping at fedex office. which way is it going to go? >> it's about 50/50. president barack obama hits the road to talk to republicans about the fiscal cliff negotiations. >> all part of the road to the fiscal cliff we've been seeing now. what's the latest, eamon? >> to really push public opinion in his direction on the fiscal
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cliff talks. the president today making the argument that he's the guy in this debate that wants to lower american taxes. >> if congress doesn't act soon, meaning in the next few weeks, starting on january 1st, everybody's going to see their income taxes go up. it's true. y'all don't like that, huh? >> and you can tell how confident president barack obama knows how positive his polls are on his side of this issue. but on the game where he's campaigning publicly and negotiating privately. as you said meeting with john boehner at the white house yesterday. and clearly the president is meeting with republicans and then checking back with democrats. we see this pattern now a couple of times last week he met with or spoke to boehner. and then met with nancy pelosi, the democratic leader on capitol
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hill. today we're told he had a phone call on air force one from harry reid. presumably to go over what it is their hashing out behind the scenes. a public and private scene going on here. >> they don't have to be face to face to keep the negotiations going. thank you. and as we get closer to the cliff's edge, a number of republicans in congress say they would be willing to accept tax increases on the wealthiest americans if they are accompanied by large enough spending cuts. >> one of those is tom cole who is a republican from oklahoma who joins us now live from capitol hill. fantastic to have you here on the show, congressman. >> good to be with you. >> what kind of spending cuts do you need to see, congressman, for you to be able to vote for those tax hikes on the top 2%? >> for the record i don't promote raising taxes on anybody. but if congress doesn't act they go up automatically. i'd like to take an area where
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we agree with the area, that we're not going to raise taxes on 98% of the american people. and just get that out of the way. let's not have those folks worried about that. but you're exactly right. the main issue here is spending cuts. and so far the speaker's put over $800 billion worth of spending cuts in entitlements alone and altogether about a $2.2 trillion package over 2/3 of which is spending cuts. and that's everything and there's a lot of things you could do here. that's everything from gradually raising the age on medicare. something that the president himself entertained at least in the summer of 2011. and we should look at means testing, higher income earners on medicare. i think long-term and the speaker mentioned this. there could be an adjustment on the social security for upper income earnings. something where they don't get a cut. perhaps it doesn't rise as fast as it would for low income earnings. there's a lot of good ideas on the table, but the problem has
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been while republicans have been willing to talk about revenue, so far the president has not been specific at all about spending cuts let alone entitlement reforms. >> we've had a number of democrats on the program as you can imagine in addition to republicans. and each time we ask about means testing on social security or medicare even, they're against that saying that that's an earned right in our country and they don't want to give that up. they don't want to set a dangerous precedent that taking something away from people who have earned this right to this entitlement program. >> if we don't change the programs, they're going bankrupt. i don't think they want that. there are a couple democratic voices out there. the president entertained this idea himself. and my colleague in the house has mentioned this as a possibility. again, we're not talking about sacrifices from people who can't afford it. we simply can't give warren buffett the same kind of benefit
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we give somebody living on social security and nothing else. >> what about the estate tax? it's supposed to go to 55% with an exemption of just a million dollars if we go over the cliff. would you be willing to adjust that? >> i would like to keep the estate tax where it is or eliminate it entirely. it's a killer tax for small businesses, farmers, and ranchers. that's really a nonstarter. i think a lot of my democratic colleagues also oppose that. that's actually something where i think the two sides could work together and keep the current rates if not lower them. 55% on a million dollars literally would shut down a lot of farms and ranches and small businesses. >> i've got to ask you. we've got a fiscal cliff meeting deal here sitting t 50% that we get a deal done. where would you put it at? >> i'm probably more optimistic about that. i'm probably more in the 60/40 range. the speaker's a good negotiator. i think honestly from position
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of strength on a lot of these things. i think the president takes his job seriously too. going over the fiscal cliff is not good for anyone. it bothers me sometimes if i hear people on both the left and the right entertain this is something that might be good politics. may be good politics for somebody, but it's bad economics for the american economy and more important for people looking for a job and people trying to hold on to a job. >> last question. i want to go back to the premise that you and other republican members of the house would be willing to allow that top tier tax rate to go higher. you know, speaker boehner's argument all this time is that it doesn't effect just those top-earning americans, but it also effects the small business owners in this country. the job creators in this country. >> the speaker's right about that. >> is that valid anymore? >> i'm not willing to -- i don't want to raise those. >> but you're willing to at least talk about it right now? >> they go up automatically. the sun's going to come up in
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the east tomorrow morning and set in the west. doesn't mean i had a darn thing to do with it coming up or coming down. we either act now to keep them from going up on as many people as possible or they'll go up on everyone. that's a disaster. let's recognize reality. take care of as many people as we can, try to do what the speaker said. let's try not a raise rates at all and find revenue in other ways. at the end of the day, if we don't do anything, those rates go up. too many people think if we hang tough my taxes won't go up. that's not the case. we have to have the cooperation of a democratic president and democratic senate. >> thank you for your time today. be sure to watch our networkwide coverage on the fiscal cliff tomorrow. it's mission critical rise above. >> maria will be back with us live at the capitol. then to the white house for our program. we have an all star lineup of
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heavy hitters. congress woman cathy rodgers. orrin hatch, allen greenspan all on deck for us tomorrow on the "closing bell." don't miss that. meantime, when woe come back are those apps on your children's cell phones invading their privacy? our julia boorstein is up next with that. and also head inside the mind of an insider trader. we'll talk with a psychologist about what drives the urge to cheat on wall street. it might actually make you nervous. >> i have sweaty palms right now. [ male announcer ] how do you trade?
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♪ [ male announcer ] while you're getting ready for the holidays, we're getting ready for you. tis the season. for food, for family, and now, something extra -- for you.
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we asked with fedex moving 19 million packages through their network today, how many packages can they process per hour? 500,000. that's at their memphis world hub which has 42 miles of conveyer belts. that's a lot of conveyer belts. >> that's a lot. >> two decades after michael melkin went to prison, it's still in the headlines and proliferating. latest time profiler to be tainted is steven cohen. >> it still brings up the e the larger issue in whether or not the rewards of cheating is worth the risks. we have clinical psychologist wendy walsh and ron gethner. great to have you both on. wendy i want to ask you first of all why do some people in wall street cheat?
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what do you think is going on in their minds in their face of potentially being prosecuted? >> well, first of all they're getting an exciting rush of dopamine in their brains no different than a shoplifter would. and they analyze their risks and rewards. the risks to them is minimal. because it is not prosecuted enough. every once in awhile there's a high profile person like martha stewart convicted and the rest of the time they go unnoticed. >> i would argue against that actually. >> i know, ron. "new york times" says the risk to reward is highly calculated and they go toward that risk feeling that the reward is going to be worth it. you don't buy that, do you? >> no, i don't. first let's look at what she just stated. the numbers are actually up on prosecution. s.e.c. is up 8% of the prosecutions from 2011 to 2010. 2012 hasn't closed the books yet. two, we've been on the inside talking to clients.
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the vast majority of your clients are the super majority have never come up. it's in rare instances where it does come up. in some of those it's where they realize they may have been in possession, or it wasn't a well thought out plan. >> do you think wendy that for a lot of these people because there's quite often a gray area, do you think a lot of these people are not even aware that what they're doing is wrong? and it's just an impulse thing? >> there may be a small amount that who are unaware. many of them are highly trained and know the rule book. i think america is good at making rules at not good at enforcing them. even though we've seen an increase. i think that's in response to our recent recession and the public awareness that the financial industry isn't legislated as much as it should be. but let's talk about risk and reward for a second. these are hunter garters.
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they want to bring their woolly mammoth. who can they do that unless they have the money? >> let's go through your assumption. most professional managers don't have a good sense of all of the rules because of dodd frank by way of example as increased the numbers of rules. i'm a lawyer having to interpret new laws daily. so a, the rules themselves are not clear. they're constantly being interpreted by courts. talk about melkin. his case in mint was -- things are clearer in hindsight. it's harder to go through what actually occurred. a lot of times the timing isn't as clear as you think it is. if it's really inside information and it is black and white, inside information isn't inside too long. so these are things that occur in very split moment hair triggers. and in many cases, everybody's motivated to staying compliant
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with the law because the risks and the damages if you're found out can be career ending. >> but, ron, let's face it. come on. work with us here. the fact remains still that the vast majority of insider trading cases don't go prosecuted. they're not detected. yes, technology detection has increased. >> you know about them more than the s.e.c. does? is everybody telling you about it? >> the number i always heard was that less than 5% of insider cases are actually discovered and prosecuted. is that not a fact? >> i have no idea. and i don't think anybody has an idea that it's a fact. i think that people like to talk about it because it's exciting. it's like sex, drugs, and rock and roll. insider trading fits in as the fourth headline. >> we've got to leave it there. we'd love to talk more about it. especially sex, drugs, and alcohol. >> by the way i should point out i know i'm nitpicking but martha stewart didn't go for insider
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trading. she was convicted for lying to law enforcement officials. she was not convicted on the charge of insider trading. >> good to clarify these things. absolutely. on we go. some software companies that create smart phone applications might have violated the privacy of children. julia boorstein joins us now with the full story. this is kind of disturbing. >> yes, mandy. absolutely. i think all parents need to go home and take a second look at the apps that their kids are using on smart phones and tablets. the federal trade commission is investigating some mobile app makers over concerns that apps for kids track and store their information without a clear disclosure to parents. although the s.e.c. doesn't name names, it gives anonymous examples like a drawing app saying it raises surgecertain concerns. knowing what he or she is doing online. the current law says that apps must disclose data collection practices.
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the ftc found only 20% of the 400 apps it evaluated are really doing that. more than half of the apps transmitted children's data often to marketers and most failed to tell parents about interactive features like ads, social network sharing, and virtual goods purchases. after examining this, the ftc wants parental consent to be required before apps collect a wide variety of data about kids. this could be the first step towards updating the children's online privacy protect act nicknamed copa which has been around since 1998 which is a lifetime ago in tech years. now, google and apple both of which of course sell these apps in their app stores may need to step up their disclosures. the ftc told us today that both companies could play a more active role in better transparency for parents. neither google nor apple responded to requests for comment. >> all right. let's get out to kayla tausche again. we're hearing the treasury is
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going to sell the remaining $240 million worth of aig shares? >> that's correct. we're seeing those headlines just hit the wire now. it's 234 million shares. that's roughly $8 billion. that's the last of the treasury's investment in aig. they will launch a fully public offering. roughly 16% of aig shares. this is a mayjor coupe for the government. still at 33 bucks even though it's down after-hours up from the re-ipo after the financial crisis. >> and it's something that will make the ceo very, very happy. the last couple times he's been on this program, he has been campaigning publicly for the government to do just that. he wants them off his balance sheet and off his back. >> it was an unpopular risk to begin with. so brings this all into the era. >> as kayla pointed out, it turned out to be profitable for the country. >> absolutely.
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in the meantime, death tax would jump. we talk about why it might cost someone's heirs a ton of money if their die on new year's day versus new year's eve. >> and later bmw and mercedes are running neck and neck for the best luxury maker in the country. phil lebeau has the huge deal story coming up. if you think running a restaurant is hard, try running four. fortunately we've got ink. it gives us 5x the rewards on our internet, phone charges and cable, plus at office supply stores. rewards we put right back into our business. this is the only thing we've ever wanted to do and ink helps us do it. make your mark with ink from chase.
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well, going over the fiscal cliff will trigger huge hikes in the death tax. >> our wealth editor robert frank breaks it down now. >> thanks, bill. the estate tax could go up even more and become a big problem for any kind of cliff deal. let's take a look. the current tax is around 30%. only those worth $5 million or more have to file. if we go off the cliff, it will shoot to 55%. anyone with an estate with $1 million or more will have to file. that will cost many more in the estate tax. many prefer the tax is abolished. obama wants a 45% rate and $3.5 million cutoff. that's midway between today's rates and the old rate. now the problem is even some democrats are siding with republicans. they say they want to keep the current rates. so all sides here remain very far apart. this matters because wealthy families need to rewrite their
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wills, their charity plans. and for the country there are hundreds of billions of dollars of taxes at stake. it's also a hugely symbolic tax. the left says these estate taxes are important to curb family dynasties. and they also call it the paris hilton tax. the right says it's the death tax and says it hurts farmers and small businesses. the policy center says the top .1% pays half of the tax. farmers, well they account for only 1% of the tax. in reality it is a tax on the very wealthy. but both sides bill and mandy, digging in very hard. which means the debate over taxing the rich will not end even if we saw the income tax situation. >> stick around. we'd like to bring in a couple extra voices on this. while some are fighting over the rate for the estate tax, there are pros and cons on both sides. we've got dan mitchell who says it should be abolished altogether and says it hurts the economy and kills job.
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>> but our friend jerry bernstein says he's got it all wrong. both join us now to make nice. won't we, gentlemen? look, nobody likes the estate tax. but that would be a huge hit on the revenues side for the government if you abolish it altogether. you can't do that politically right now, can you? >> with obama in the white house, we probably can't do anything good. but as an economic matter in terms of not discouraging saving and investing and as a moral matter not taxing people just because they die, the death tax should be wiped out. australia got rid of their death tax. even the former soviet union russia got rid of their death tax. countries around the world figure out it makes no sense to tax and tax and tax again. get rid of it. >> actually 28 out of 34 of the oecd advanced economy countries have either a wealth tax or estate tax. so factual error number one.
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number two, you're absolutely right. if you were to completely abolish this which nobody is talked about except dan mitchell, i guess. you'd be talking about something like half a trillion dollars of revenue lost over the next ten years. where you're going to get that from? you're going to get that from programs that help lower income people or the middle class themselves. now you're talking about literally a transfer from the top .2%. not 2%. but this tax only hits the two in 1,000 most wealthy estated. .2%. and that's because of the exemptions we were talking about. currently $5 million for an individual, $10 million for a couple. this is a rare atmosphere up there. it would be a huge hit to the deficit. >> jared, it's not your money. it's not the government's money. if somebody like steve jobs or bill gates or whoever goes out and makes a lot of money, they're first paying income tax. then a double tax on dividends.
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then the corporate taxes is another layer of tax. then you want to come in like the grim reaper and take money from their family when they die. it's not the government's money. we have a problem in washington of too much spending. you want to make the matter worse by putting more blood in the water with the hungry sharks. >> so first of all, dan, the fact that it's not my money, that's an argument about any taxation. i know folks would love to bring the tax rates to 0 for everything. the real world, whee government actually has to do things, defend the country, pay for social insurance, things that people care about, education, infrastructure, we need to collect revenue. when you are talking about collecting revenue from the top .2% of the wealthiest estates, folks whose capital gains, unlike you just said, folks whose capital gains have never been taxed before, because they've never been realized. they've never been sold in the market. >> okay. okay. we have to unfortunately leave it there. we've got time constraints.
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apologies to robert frank. >> they sucked all the oxygen out of the room. that's okay. dan and jared making nice right there. >> is that making nice? >> that was them making nice. >> okay. >> thank, guys. talk about bang for your buck. mercedes are putting pedal to the metal for your money. >> wait until you hear about the unprecedented deals that are out there. and her financial advisor made a retirement plan, they considered all her assets, even those held elsewhere, giving her the confidence to pursue all her goals. when you want a financial advisor who sees the whole picture, turn to us. wells fargo advisors. [ male announcer ] you are a business pro.
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the race for u.s. market share between mercedes and bmw sparking very attractive deals right now. >> our auto reporter phil lebeau has been doing some investigating. what you have found? >> look at the deals you're going to find right now. as at last month, at least $4,000, and that's just the beginning. there are even sweeter deals this month. for bmw, the holiday deals include no payments for up to five months. that's one reason why you see bmw sales surge 45% last month. this is all about winning the title of best luxury automaker in the u.s. mercedes leads by 1,800 vehicles, yet hasn't had that vehicle by 1999. it wants to keep that title. also because they've been increasing production at their plant in alabama. so, they got to move this product as much as possible. but for both bmw and mercedes
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and investors, listen, the last three months haven't been that bad. bmw certainly has outperformed mercedes over the past three months. the bottom line is, if you are looking for a luxury car, this is the time to be buying. >> great stuff. good to know. phil, thank you very much. phil lebeau. well, you give out 90 seconds and our panel of wall street's top market pros will tell you what will move your money first thing tomorrow morning, so, stick around for that, after this. [ male announcer ] citi turns 200 this year.
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with 30 seconds on the clock, our next guests will tell you what could move the market tomorrow. >> here we go. joining us, brian. chad morgan lander and jennifer delay nooe from ubs. brian p, 30 seconds, what moves the market tomorrow? go. >> all right, thank you, bill. first, we're going to have a focus on bond land, what's coming on the economic front, obviously wholesale inventorien, trade balance. taking a look at japanese machinery orders tomorrow. paint some of the overnight tape. fiscal cliff, obviously dominant on the scene. no major events, as i see them scheduled those there will be some of the joint committee in
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congress on thursday, talks about some of the outcomes, should we go over fiscal cliff. and then looking beyond that, really, it's really about the euro zone and keep an eye out. we have meetings going on wednesday, thursday, friday. >> got it. chad, what about you? >> bill and mandy, three things to watch for tomorrow. as your previous guest said, wholesale inventory number. you have to watch that, if you start to see a long-term trend where the companies are building inventories, that's something more ominous to the economy. the small business index coming out tomorrow. that, of course, should show a gradual increase in its pace. and the federal reserve is starting their meetings tomorrow, so, for wednesday, we're expecting an additional $40 billion every month of additional treasury purchases to take place on the operation twist. >> jennifer, 30 seconds. what do you see tomorrow? >> yeah, we're going to be watching the trade data and not least because chinese export